Latest news with #Roaring'20s
Mint
18-05-2025
- Business
- Mint
Just how expensive are stocks after all the ups and downs? We check the math.
The market has absorbed the early blows of President Trump's tariffs, making up all its lost ground. Yet that rekindles a Wall Street worry from earlier this year: By the typical measures, stocks look very pricey right now. Following outsize gains in recent years, some analysts entered 2025 concerned that high valuations left share prices especially vulnerable to any hint of trouble in the economy. And so far, stocks have delivered slightly worse returns than bonds this year—even after their recent rebound. Here is a look at how expensive stocks are currently, and what that might mean for their future performance: P/E ratios There are myriad ways to value stocks. The most well-known is the price/earnings ratio. The most common applications of this metric compare stock prices with a company's past 12 months of corporate earnings, analysts' expectations for its next 12 months of earnings or so-called cyclically adjusted earnings: the average annual earnings of the past 10 years, adjusted for inflation. When the whole S&P 500 is looked at, all three currently show investors paying a high price for every dollar of earnings compared with what they have paid in the past. Earnings yield vs. Treasury yield Wall Street analysts often like to flip the price/earnings ratio upside down, creating an earnings-to-price ratio. Known as the earnings yield, it is expressed as a percentage and sometimes used as a rough guide to the annual return that investors can expect over an extended period. Investors can then compare stocks' earnings yields with yields on U.S. Treasurys. That offers a sense of how much investors are being compensated to hold riskier investments over ultrasafe government bonds. Based on real cyclically adjusted earnings, the S&P 500's earnings yield is currently around 2.8%, or 1.4 percentage points above the inflation-adjusted 10-year Treasury yield, according to data from the economist Robert Shiller. That gap, sometimes known as the excess CAPE yield, is well below its historical average, suggesting investors are so eager to buy stocks that they are willing to accept a smaller premium for the risk of losses. History as a guide Just because stocks look expensive by these measures doesn't mean they are about to plunge. In periods such as the Roaring '20s and the 1990s tech bubble, frothy markets defied gravity for years. Still, those rallies eventually ended, leading to years of price declines. There is, as a result, a fairly tight relationship between valuations and what stocks have historically returned over longer periods, such as 10 years. Measures of relative valuation, like the excess CAPE yield, have been especially good at predicting the relative performance of stocks versus bonds. A smaller excess yield has typically led to a smaller return compared with bonds over the next 10 years; a bigger premium has led to a bigger excess return. The drawbacks Aswath Damodaran, a professor at the Stern School of Business at New York University, is widely known on Wall Street as 'the dean of valuation." He says one drawback of a standard S&P 500 earnings yield is that it doesn't account for future earnings growth, effectively treating stocks like bonds with fixed annual payments. He has seen little evidence that valuations can be used to time swings in the market. Damodaran has devised his own estimate of the risk premium that stocks offer over bonds. His incorporates analysts' expectations for companies' earnings growth. Right now, that calculation suggests that stocks are more reasonably priced than other metrics—although Damodaran says that he uses it as a tool to value individual stocks, rather than a guide to buying or selling the overall index. Putting them to use Others are happy to employ valuation metrics in their investment strategies. As a reasonable guide to future returns, valuations are one tool that investors can use to build portfolios that match their risk tolerance and to make adjustments over time, said Victor Haghani, founder of Elm Wealth. It might make sense for a young person to own 100% stocks, but most people by the middle of their careers want something less volatile, he said. An investor who put $1 into the S&P 500 some 60 years ago could have outperformed the market by switching completely to 10-year Treasurys when the excess CAPE yield fell to particularly low levels, according to a Wall Street Journal analysis of the data compiled by Shiller. For example, investing in bonds after any month that the excess CAPE yield averaged less than 1.75%—and stocks otherwise—would have yielded a real annualized return of 6.6%, or 0.5 percentage point more than holding stocks the entire time. Write to Sam Goldfarb at
CBC
10-04-2025
- Entertainment
- CBC
A review of an American classic, The Great Gatsby, on its centenary celebration
F. Scott Fitzgerald's novel is emblematic of the jazz age and the Roaring '20s. Annie Murray, the rare books and special collections librarian at the University of Calgary, shares insights about the book and shows off a rare first edition.
Chicago Tribune
07-04-2025
- Business
- Chicago Tribune
Letters: President Donald Trump's tariffs are confronting our federal deficit head on
While I am no fan of President Donald Trump, I nonetheless feel his government downsizing and tariffs are a very serious attempt to address two very serious problems our nation is facing. Look no further than in fiscal year 2024: The federal deficit was $1.8 trillion, and in calendar year 2024, the trade deficit was $1.2 trillion. These two economic realities could bankrupt the dollar, seriously crater our economy and make the Depression look like the Roaring '20s. Some say this is crying gloom and doom, that everything is fine and we certainly didn't need to take these drastic actions. All that is required is a few tweaks to that combined $3 trillion? Others say they are only concerned about things going well now — whatever happens in the future, they'll be fine with it. (Sure, they will.) 'Why did we have to rock the boat' is the idea — as in, the time to deal with the boat is not now but when it sinks. If America is going to maintain its standard of living, we have to deal with these two issues and get them fixed. Don't like Trump's approach? Send in a letter suggesting a less painful alternative. It's the easiest thing in the world to complain; it's much harder to recommend a solution, especially one that requires hard choices and painful tradeoffs. — Neil Gaffney, Chicago Manufacturing economy The Tribune Editorial Board is pretty certain tariff diplomacy doesn't work ('Trump's foolish tariffs take the US economy back centuries,' April 3). I say we have to try something. Our parents benefited from raising families with a manufacturing economy that provided well-paying jobs in which things of value were produced. Our elite business and political leaders let these jobs go elsewhere with the promise of cheaper goods imported. However, countless middle-class jobs were lost. Millions of Americans were slowly boiled like lobsters, economically. Meanwhile, the financiers and politicians feasted on lobster, the smart people on the editorial board included. Today, it is clear to me that our global partners seem to have gone a bridge too far with high tariffs on U.S. goods and products. Time to fix things. We have been talking for 20 years with our friends without much to show for it. We will know in 90 days if this be successful. I look forward to the editorial board's apologies and confession that good old Trump was right! So much for the economists, socialists and politicians. — Dennis Demoss, Barrington Be patient with tariffs The Tribune Editorial Board is taking a short-term view of what President Donald Trump is attempting to do and what should have been done decades ago. Other countries abuse tariffs that have been in place for decades. We should have no tariffs between countries, and that is what he is working toward. Be patient. — John Wiedemann, St. Charles Hard times coming As a small business owner in Chicago, I view with horror the new worldwide tariffs from President Donald Trump's administration. I am a longtime bookseller specializing in out-of-print and rare books and selling online through my website and various venues. Much of my income is from overseas sales, but my main clientele is composed largely of middle-class domestic collectors, colleges and libraries. As all books are an easily dispensable commodity in hard times when prices rise for staples and necessities, I have no confidence in Trump's ideas that the pain from tariffs will be short-lived and of overall benefit to small businesses. I have seen this meltdown in book sales play out before with terrible consequences. The year was 2008, and the country was undergoing one of its most severe recessions, with businesses closing all over. At the time, I was still employed as a schoolteacher, so my business weathered the collapse much more easily than it will now. As expected, sales plummeted as book buyers cut nonessentials from hurting budgets, and I had to extend retirement plans to weather the crisis. Now that I am a pensioned, retired teacher with my business as the main source of income, I do not know how my wife and I will be able to weather the sure collapse in sales resulting from the average middle-class family being hit by the predicted $7,000 annual budget shortfall from rising prices. I only hope Republicans in Congress will help block Trump's misguided, thoughtless economic policies. If not, we should watch for a bloodbath between now and the midterm elections. — Carlos M. Martinez, Chicago What is he thinking? President Donald Trump imposed a 10% tariff on Heard Island. This island is uninhabited, save for penguins. As the 401(k) accounts of many Americans are tanking, one must wonder: What does this tell us about the president, and what, if anything, is he thinking? — Jeanine Budach, Mesa, Arizona Blaming union labor The Michael Ramirez editorial cartoon of April 4 shows a monkey wrench gumming up the manufacturing gears of the U.S. economy. The wrench is labeled, 'Labor costs, unreasonable union demands.' The first problem with this is that union membership in the U.S. is only 10%. That's down from 20% 40 years ago. Hard to imagine that unions are the problem here, when they represent only 10% of labor. As for labor costs, in this country, a third of the wealth is held by only the top 1% of the population. Apparently, Ramirez thinks we should smash down laborers even more and cut their wages so that company owners can gather even more wealth. Here are some real monkey wrenches in the works of the economy. So many people cannot earn a living wage. They struggle, sometimes with two jobs, and cannot get ahead. The data is clear. The middle and lower classes are falling further behind. And here's a monster wrench in the works. President Donald Trump's tariffs are now going to make things much worse, for everyone. Will the tariffs induce industry leaders to move their manufacturing back to the U.S. and pay their workers more? We'll see, but I doubt it. — Blaise J. Arena, Des Plaines Steep price increases I just had to respond to the letter 'Avoiding cost of tariffs' (April 3). The writer thinks that all you need to do is buy a product made in the USA to avoid tariffs. Let's say that I am a manufacturer whose competitors raised their prices by 20%. I would look at this as an opportunity to raise my own prices. Perhaps not by the same percentage, but I would certainly raise my prices. This, of course, applies to all products, not only automobiles. So yes, I expect steep price increases for just about any product, made in America or not. — Emilio Dilonardo, Bolingbrook Americans will lose David N. Simon claims in his April 3 letter that 'people can buy vehicles made in the U.S. and avoid the cost from tariffs.' That's absolutely incorrect. This administration intends to impose tariffs on imported car parts on May 3. 'Domestic' vehicles contain an average of 40% to 50% imported content. The Bank of America thus estimates the cost of 'domestic' vehicles will go up by an average of $3,285 as a result of these ridiculous taxes that cannot be avoided by buyers of any make. Former Ford CEO Mark Fields told CNN: 'The cost of vehicles will go up. It's just math. The bottom line is there is absolutely no vehicle that won't be impacted by tariffs.' When all new cars become more expensive, demand and thus prices increase for used cars. All Americans will lose. — Stephen Jarzombek, St. John, Indiana What we have seen Apparently, one letter writer ('Reversal on Elon Musk,' April 3) assumes that those of us who oppose everything that the president and his unelected henchman have done are devoid of critical thinking skills. Let me set him straight. We have seen and heard with our own eyes and ears the nastiness, cruelty, lying, gaslighting, misinformation, disinformation, boasting and slash-and-burn tactics of the current administration. Neither of the two megalomaniacs has given the American people any proof of fraud, nor have any individuals been charged with fraud, although hundreds of thousands have been summarily fired, often by email or text. I do agree that these are 'crazy and dangerous times,' but not because of irrationality on our part. We remain clear-eyed about who deliberately stokes fear and intolerance while they arrogantly disregard who suffers as a result of their policies. — Karen Teplitzky, Chicago Not Reagan's party In the March 31 letter by Mike Kirchberg ('Putting our nation first'), his final comment, 'If you're not with us, you're against us,' summarizes the cult of Donald Trump perfectly, and it disturbed me greatly. That comment is not the American way. We root for each other, wanting each other to succeed and not fall, because when one succeeds, we all do. I'm 60 years old. I taught secondary school for over 30 years. I also worked for a Christian missionary nonprofit for six years. Americans have a long history of giving to each other and to our fellow man in other countries. I appreciate it when I can buy American, but sometimes, it just isn't financially feasible. To propagate the 'us versus them' mentality is unkind and doesn't support the American spirit. There is a reason this registered Republican hasn't voted her party since 2012: It no longer resembles the party of Ronald Reagan, George H.W. Bush and George W. Bush I once supported, in which we had our differences but respected each other's right to have differences. I desperately hope we can get back there — and soon. — Elizabeth Oswald, Elgin Immediate harm Time has run out. The future of our country's health care can no longer be about second-guessing, finger-pointing or armchair prognostications. It's now about personal safety and minimizing individual risks. Every citizen's well-being is in jeopardy. The rapid dismantling of our public health infrastructure and its ripple effect on private delivery systems will cause immediate and significant harm. From access to curative drug therapies and emergency medical services, to the tracking of infectious diseases and warnings about community safety threats, to scientific breakthroughs and medical advances, we're about to live through an unprecedented period of health care catastrophes. The stunning loss of thousands of federal health care professionals will be devastating. Call them bureaucrats, but these dedicated, nonpartisan professionals have improved and saved your life many times over. Think: COVID-19, Meals on Wheels, Alzheimer's research, fentanyl awareness and diabetes prevention. I've worked in the health care field over 40 years and have seen it through a public and private lens and from a payer and provider perspective. Access, affordability and quality have always challenged the industry. But never has there been a future in which doom and gloom has been so real, for so many. Pharmaceutical and medical device monitoring, cancer screenings, immunizations, smoking cessation, mental health, drug abuse, social determinants of health, cybersecurity and reproductive rights will all suffer significant and deadly setbacks. Chaos will prevail. And, there is no plan! It's up to us and our personal medical support networks to collectively fill the void created by the nation's new health care leadership that has no management experience or no credible scientific or medical background and stands on a foundation of conspiracy theories and false narratives. We're in a place of peril — and we're on our own. — Lindsay Resnick, Chicago It's time to show up On a recent Saturday, I went to see the local version of the protests that were held nationally at Tesla dealerships. I saw one of the problems with the effort to oppose the Donald Trump regime. Pro-Trump counterprotesters showed up in superior numbers. They made themselves more visually impressive by bringing large flags. This was not a good look for the future of democracy. It made it look like this was Trump country, which it demonstrably is not. Kamala Harris was an 11-point winner in Illinois and a 42-point winner in Cook County, where the dealership was. Where was the representation on the day of the protest from that overwhelming majority? My college social sciences teacher taught me that the organized minority beats the disorganized majority. This was a textbook example of this principle. The kind of Trump supporters who showed up on this day are a tight-knit bunch for whom supporting Trump is a life-defining characteristic because they have been drilled to believe that they are under an existential threat. It astonishes me that there is, still, so much apathy on the other side. As we are now seeing dramatically demonstrated, people who don't want to think about politics will be ruled by those who do. If those who want to undermine democracy show more interest than those who want to preserve it, superior numbers on the latter side won't help. It doesn't matter how big your stick is if you don't swing it. If Trump supporters cannot be made to look like the minority that they are in Cook County, what reason is there for the regime to think that it does not have enough popular support to carry on with its program? In its collective mind, it stretches whatever support that it sees, like when it claims that a historically slim margin of victory was a popular mandate for radical changes. People must demonstrate that this is not so. Changing attitudes will require showing enough interest to make the numbers count. Americans failed at that in November. They must not assume that the supply of second chances is unlimited. Find a protest, be there and express yourself.
Chicago Tribune
06-04-2025
- Entertainment
- Chicago Tribune
Chicago's connection to ‘The Great Gatsby' as Fitzgerald's novel turns 100
This week marks the 100th anniversary of the publication of F. Scott Fitzgerald's 'The Great Gatsby.' It was destined to be the definitive literary monument of the Roaring '20s, a decade of fortunes made and lost on Wall Street. Prohibition gave booze the lure of the illicit. But the novel's debut on April 10, 1925, was a dud. It sold fewer than 20,000 copies. The reviews were generally favorable, if not enthusiastic. But it was trashed by H. L. Mencken, editor of the Baltimore Sun and dean of America's literary critics. 'The theme is the old one of a romantic and preposterous love,' he wrote, 'reduced to a macabre humor.' That stung Fitzgerald, who had been developing the storyline through previous short stories and novels. Like many writers whose work is classified as fiction, that didn't mean that Scott, as he was known, made it up out of the whole cloth. He distilled real-life experiences into characters moving through scenes he'd witnessed. Thanks to Fitzgerald's meticulous record-keeping, we know the route the novel's protagonists, under the aliases Jay Gatsby and Daisy Buchanan, took to the story's Long Island setting. Fitzgerald kept a ledger book in which he listed his literary earnings and daily routine. At the top of page 169, he recorded Daisy Buchanan's conception, by noting: 'Met Ginevra.' Ginevra King was a young socialite from Lake Forest, Illinois. 'Once I thought that Lake Forest was the most glamorous place in the world. Maybe it was,' Fitzgerald recalled to his daughter 25 years after his first visit. He was a houseguest there in 1915. One of the homes he visited was on Kingdom Come Farm, a 50-acre estate designed for Ginevra King's father by the ultra-fashionable architect Howard Van Doren Shaw. It and other mansions that line Lake Forest's ravines and shoreline are punctuated by so many windows they often look more like hotels than family residences. They look like the world inhabited by Isabelle, the heroine of Fitzgerald's 1919 story, 'Babes in the Woods.' 'The vista of her life seemed an un-ended succession of scenes like this, under the moonlight and pale starlight, and in the backs of warm limousines and low cosy (sic) roadsters stopped under sheltering trees — only the boy might change.' Time magazine pronounced Ginevra King and three friends the cream of the crop of Lake Forest debutantes in 1919. They wore gold pinkie rings engraved 'The Big Four.' One was Edith Cummings, a premier amateur golfer of the 1920s. She appeared as Jordan Baker in 'Gatsby,' where Scottie wrote: 'there was a jauntiness about her movements as if she had first learned to walk upon golf courses on clean, crisp mornings.' Years later, King described herself in a letter to Fitzgerald's daughter: 'Goodness, what a self-centered little ass I was!' Fitzgerald and King met Jan. 4, 1915, at a sledding party in St. Paul, Minnesota, his hometown. She was 16 and visiting her roommate at the ultra-posh Westover School in Middlebury, Connecticut. He was 18 and a freshman at Princeton University. 'The couple next to them had their backs turned and he kissed her little neck and her ears and never her lips,'' he wrote in 'Winter Dreams,' a short story based on that sleigh ride. From the moment they met, King and Fitzgerald were united in a peculiarly Jazz Age puppy-love affair. 'Her voice is full of money,' he wrote of Daisy Buchanan, King's alias in 'Gatsby.' Fitzgerald and King remained emotionally linked through all the twists and turns of their lives. When she returned to Westover, he deluged her with letters, which pleased her. Her self-esteem was based on how many letters she received from suitable suitors. But he was irked that she read his intimate letters to classmates and rival suitors for their amusement. During one of the Lake Forest parties, Fitzgerald had heard something that should have alerted him to the peril posed by King's flirtatiousness. She was his girlfriend. But another guest, Deering Davis, boastfully announced: 'I'm going to take Ginevra home in my electric.' Was the dashing polo player and aviator emboldened because Fitzgerald didn't have a car? Let alone an electric one, then as now a prestigious automobile. Fitzgerald's father lost his salesman's job in 1908. But his mother was heir to a highly successful grocery business. He was named after a distant relative of some note, Francis Scott Key, who wrote the lyrics for 'The Star-Spangled Banner.' That gave the family status and an upper middle-class income, by St. Paul standards. His mother raised Fitzgerald to think that cachet and her money entitled him to membership in the upper class. Lake Forest's and Chicago's elite demurred. 'Poor boys shouldn't think of marrying rich girls,' Fitzgerald overheard a relative of King's pontificating. 1 of Ginevra King, center, with friends at the country wedding of Adele Blow and Lt. Wayne Chatfield-Taylor in La Salle, Illinois, on Aug. 22, 1917. The couple was married at Blow's parents estate, Deer Park, which is now Matthiessen State Park. Society members were brought to the wedding on a special train from Chicago. (Chicago Tribune historical photo) In 1915, Fitzgerald asked King to be his date for Princeton's sophomore prom, but her mother forbade her to attend it with a middle-class young man. Two years later, King dumped Fitzgerald, telling him she'd found her true love, the fabulously wealthy William H. Mitchell. 'I wish you knew Bill so that you could know how very lucky I am,' she wrote to Fitzgerald. Mitchell was the son of a business associate of her father's, who made an arranged marriage for them, a linking of two prominent families. Years later, she moved on to the scion of another elite family. Fitzgerald's exit from this emotional rollercoaster was the Army. He dropped out of Princeton and enlisted. Stationed in Montgomery, Alabama, he met and married Zelda Sayre, a southern socialite. She reminded him of King. Upon being discharged from the Army, Fitzgerald wrote the emotional residue of his and King's affair into 'The Great Gatsby.' He conceived the book on Long Island and finished it while he and Zelda were living in a villa in Saint-Raphael, France. The final line of the book observes, 'And so we beat on, boats against the current, borne back ceaselessly into the past.' Its narrator works in a New York securities firm, lives in the West Egg section of Long Island, and has dinner with Tom Buchanan and his wife, Daisy. 'Daisy was my second cousin once removed, and I'd known Tom in college,' Nick Carraway explains. His neighbor, Jay Gatsby, gives Saturday evening parties as fabulous as his origins and the source of his wealth are mysterious. 'The truth was that Jay Gatsby of West Egg, Long Island, sprang from his Platonic conception of himself,' Fitzgerald wrote. Gatsby hoped the wild Bacchanalia would bring back Daisy, his former lover. Because of his link to Daisy, Carraway is recruited into Gatsby's scheme to win her back. Gatsby dangles the prospect of giving Carraway business. The scheme is further complicated because Tom Buchanan is cheating on Daisy. That soap-opera scenario is made palatable by the poetic beauty of Fitzgerald's imagery, such as: 'Her remark was addressed to the premature moon, produced like the supper, no doubt, out of a caterer's basket.' But the novel didn't sell, and Fitzgerald sustained himself by churning out move scripts in Hollywood. Many weren't filmed. Others rewritten by teams of heavy-handed script doctors. When King visited him there, Fitzgerald was drunk and incoherent. He died in 1940, broke and thinking he was a failure. His death was followed by a real-life epilogue akin to a schmaltzy movie: 'The Great Gatsby' became a best seller and a perennial entry on the reading list of high school English courses. Over the 100 years until the Cambridge Centennial Edition was displayed in bookstore windows this year, approximately 30 million copies of 'The Great Gatsby' had been sold. As Fitzgerald once noted: 'An author ought to write for the youth of his own generation, the critics of the next, and the school masters of ever afterward.' Ron Grossman is a columnist emeritus for the Chicago Tribune. His columns vary from social and political commentary to chapters in Chicago history. Before turning to journalism, Grossman was a history professor. He is the author of 'Guide to Chicago Neighborhoods.'
